Ford and VW have decided, at least for now, to end the development of shared Level 4 Autonomous Vehicle (AV) robotaxis through their joint venture, Argo.ai. The entity, in which each company owns a little under 40%, will be disbanded with the two companies taking on some of the key engineers and developers to work directly for them in autonomous driving and ADAS technologies.
It may come as something of a surprise that two of the world’s large OEMs are apparently exiting the race to a Level 4 Shared AV. But the cost of development is high and ongoing at a time when model range electrification is also absorbing cash. The lead time to profitable Shared AV fleets is too long for these businesses. Getting to Level 4 autonomous driving is a large technical challenge, but there are also other significant hurdles in regulation, commercial models, (potential) user attitudes, diversity of local complexity, infrastructure and more.
Consolidation in the sector was always likely and there may yet be more to come. For now, the Shared AV landscape in the US is narrowing to just a few players, with GM’s Cruise and Alphabet’s Waymo appearing more committed and furthest ahead. A number of ventures in China may also start to consolidate around a small number of tech companies, such as Baidu.
For the current set of leaders in the field, pilot programmes continue to be rolled out. If we are going to see further exits, such activity will likely continue right up to the point when it stops, as illustrated by the announcement on Argo AI’s website (dated 29 September) that its robotaxis will be available through Lyft in Austin, Texas.
At our recent GlobalData “Key Themes in Automotive” event, we discussed some of the difficulties in reaching the point at which large-scale deployment of Shared AVs might be possible. It is not so much that there is a lack of belief that Level 4 AV developers will eventually get there – it is more that it could take more than a decade to do it. Several hundred delegates from across the automotive sector seemed to be in broad agreement, with most putting the large-scale arrival of Shared AV fleets in the 2030s, and 40% suggesting it would be later than 2035.
The two-path approach looks set to continue. On one development path, we see companies like Waymo striving to create Level 4 AV vehicles for shared fleet usage; and on the other path, OEMs (and their suppliers) carefully developing ADAS technologies up through the SAE Levels but aimed at owned vehicles. Some, like GM, have a foot in both camps for now and, ultimately, both routes may be successful. But we will likely need to wait until the 2030s before we see the potential for transformative change brought about by truly self-driving vehicles.